Fillable VA Cash-Out Net Tangible Benefit Initial Loan Comparison (Flagstar Bank)

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VA Cash-Out Net Tangible Benefit Initial Loan Comparison (Flagstar Bank)

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VA Cash-Out Net Tangible Benefit Initial Loan Comparison
IX. Government Guidelines 1 of 2 Document #9707-A
Return to Top 04/03/2019
Borrower(s): Flagstar Loan Number:
Borrower(s):
Property Address:
City, State and Zip: ,
I / we, the undersigned, are the mortgagors on the above captioned property.
This information must be provided to the Veteran within three business days from the date of the loan
application and at loan closing. The borrower must certify receipt of both disclosures (i.e. signature, e-
signature, email from the borrower certifying receipt, email read receipts, system time/date stamp where a
borrower certified receipt, etc).
Application Date:
Date Sent to Borrower:
NET TANGIBLE BENEFIT REQUIREMENTS
VA’s net tangible benefit requirement for VA TYPE I and TYPE II cash-out refinance loans. All VA TYPE I and
TYPE II cash-out refinances must provide the net tangible benefit required by VA, an exception cannot be
granted. For additional information refer to VA Circular 26-19-5 and 26-19-5 Change 1.
The refinancing loan must satisfy at least one of the following eight NTB, check all boxes that apply:
The new loan eliminates monthly mortgage insurance, whether public or private, or monthly guaranty
insurance
The term of the new loan is shorter than the term of the loan being refinanced
The interest rate on the new loan is lower than the interest rate on the loan being refinanced
The payment on the new loan is lower than the payment on the loan being refinanced
The new loan results in an increase in the borrower’s monthly residual income as explained by 38
CFR 36.4340(e)
The new loan refinances an interim loan to construct, alter, or repair the home
The new loan amount is equal to or less than 90 percent of the reasonable value of the home, or
The new loan refinances an adjustable rate loan to a fixed rate loan
LOAN COMPARISON DISCLOSURE
VA’s loan comparison requirement for VA Type I and Type II Cash-out refinancing loans. All VA Type I and
Type II must complete the loan comparison of the six key loan characteristics or terms for the existing and
refinancing loan, no exceptions.
Loan Information Existing Loan Proposed Loan Impact of Refinance
VA Loan Number (LIN)
Loan Balance
$
$
$
Monthly Payment (P&I)
$
$
$
PMI/MIP included in monthly
payment
$ $ $
Loan Type
Interest Rate (%)
%
%
%
Remaining Term
Total of the Remaining
Schedule Payments -
$ $ $
Loan-to Value (%)
%
%
%
HOME EQUITY DISCLOSURE
VA’s requirement of an estimate of the home equity being removed from the home as a result of the refinance
and explain how the removal of the equity may affect the sale or refinance of the home in the future.
Loan Information Existing Loan Proposed Loan Impact of Refinance
Equity Remaining in subject property
$
$
$
Explanation
FEE RECOUPMENT
Months to Recoup only applies to TYPE I cash-out refinancing loans made to refinance an existing VA-
guaranteed home loan.
VA Cash-Out Net Tangible Benefit Initial Loan Comparison
IX. Government Guidelines 2 of 2 Document #9707-A
Return to Top 04/03/2019
The following calculates the total number of months to recoup all fees and charges financed as part of the loan
or paid at closing. If the loan being refinanced has been modified, the principal and interest reduction must be
computed/compared to the modified principal and interest monthly payment.
If the calculation on line C exceeds 36 months, then it’s not eligible for VA guaranty.
A. $
Monthly decrease in principal & interest payment (Existing P & I minus Proposed
Loan P & I)
Existing Loan P&I - Proposed P&I = Monthly Decrease
B.
$
Total of all – Loan Estimate categories are added for the initial statement (origination
charges, services you cannot shop for, services you can shop for, taxes and other
government fees, other, or VA funding fee). This is the total costs minus the VA
funding fee.
• Fees paid on behalf of the veteran through lender credits and premium
pricing may be excluded from the calculation if they offset allowable fees
listed in Chapter 8 of VA Pamphlet 26-7
• Fees paid on behalf of the veteran through lender credits and premium
pricing that offset unallowable fees or result in some sort of consideration the
veteran provides must be included in the recoupment calculation
• Pre-paid expenses that would have been payable under the loan being
refinanced are not included in the recoupment calculation. Examples of
excluded pre-paid expenses are property taxes, escrows, homeowner’s
insurance premiums and HOA dues.
For additional information, refer to Ability to Repay Standards and Qualified
Mortgage Definition Under the TILA and Interim Final Rule FAQs.
C.
=
Number of months to recoup total cost (Divide amount on line B by monthly
decrease in principal and interest payment on line A).
INTEREST RATE COMPARISON
These requirements apply to TYPE I refinancing loans made to refinance a VA-guaranteed home loan, in
which the loan being refinanced has a fixed interest rate.
Prior Loan Rate:
- New Loan Rate
=
FIXED RATE-TO-FIXED RATE
The interest rate of the refinancing loan may not be less than 0.5% (50 basis points) of the interest rate on the
loan being refinanced.
FIXED RATE-TO-ADJUSTABLE RATE
The interest rate of the refinancing loan may not be less than 2 percent (200 basis points) of the interest rate
on the loan being refinanced
• Discount Points > 1%: If discount points are included in the refinancing loan amount, the loan amount
may not exceed and LTV of 90%.
• Discount Points < 1%: If discount points are included in the refinancing loan amount, the loan amount
may not exceed an LTV of 100%.
I hereby acknowledge that I/we understand the effects of this refinancing loan has on my loan balance,
payments, interest rate, term, total payback of payments and remaining equity in my home should I/we accept
a refinance loan.
Borrower’s Signature
Date
Borrower’s Signature
Date
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VA Cash-Out Net Tangible Benefit Initial Loan Comparison (Flagstar Bank)

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Completed 1 July 2021

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